What Determines Private Investment? The Case of Pakistan

This study is an attempt to analyse the determinants of private investment in Pakistan over the period 1972-2005. The ARDL co-integration approach is employed to check the existence of a long-run relationship as well as short-run dynamics of investment. The results show that most traditional factors have little or no impact on private investment. These results may support the idea that nontraditional factors such as quality of institutions, governance, entrepreneurial skill, etc., are prerequisites for private investment to flourish. We find partial support for the accelerator principle and the crowding-out hypothesis in the case of Pakistan. However, the hypothesis that the volume of the funds is as important as the cost of the funds used in financing private investment and the McKinnon-Shaw hypothesis are not verified in the case of Pakistan.Private Investment, Growth, Crowding Out, co-integration

What Determines Private Investment? The Case of Pakistan

This study is an attempt to analyse the determinants of private investment in Pakistan over the period 1972-2005. The ARDL co-integration approach is employed to check the existence of a long-run relationship as well as short-run dynamics of investment. The results show that most traditional factors have little or no impact on private investment. These results may support the idea that nontraditional factors such as quality of institutions, governance, entrepreneurial skill, etc., are prerequisites for private investment to flourish. We find partial support for the accelerator principle and the crowding-out hypothesis in the case of Pakistan. However, the hypothesis that the volume of the funds is as important as the cost of the funds used in financing private investment and the McKinnon-Shaw hypothesis are not verified in the case of Pakistan.Private Investment, Growth, Crowding Out, Co-integration

Financial Sector Restructuring in Pakistan

In this paper an attempt has been made to review the financial restructuring process and its importance for economic growth and macroeconomic stability. The main focus is on the financial restructuring efforts undertaken by the government of Pakistan since 1990. We alsoanalyze the impacts of financial restructuring by using various financial indicators. The overallresults suggest that financial industry in Pakistan showing remarkable and unprecedented growth.Unlike 1990, the performance of financial sector is much better today. After the successfullycompletion of first generation of reforms, the introduction of second generation of reforms arerequired, which helps further strengthen the financial system and transform the benefits of the first generation of reforms to common man.

LONG-RUN AND SHORT-RUN DYNAMICS OF FOREIGN EXCHANGE RESERVES FLOWS AND DOMESTIC CREDIT IN PAKISTAN

This study formulates and examines the monetary approach to the balance of payments by incorporating the currency substitution version of money demand function for Pakistan over the period 1962-2005 using FM-OLS and Johansen-Juselius cointegration techniques. The results suggest that real output, real exchange rate and domestic credit play an important role in the determination of foreign exchange reserves in Pakistan in long-as well in short-run. Moreover, the monetary authorities sterilize foreign exchange reserves by 12% in long-run and 66% in short-run. The results support the evidence of long-run causality running from reserves to domestic credit. One important policy implication from the empirical analysis is that the validity of the monetary approach to the balance of payments and the effectiveness of monetary policy depend on the nature of the money demand function. As the specification of money demand has changes the evidence based on monetary approach has also changes.Monetary Approach, Foreign Exchange Reserves, Domestic Credit, Cointegration

Capital Flows and Money Supply: The Degree of Sterilisation in Pakistan

In this study an attempt has been made to develop and estimate the domestic credit policy reaction function to analyse the monetary implications of interventions and sterilisation policy in Pakistan using quarterly data ranging from 1982 Q3 through 2001 Q2. By employing Johansen multivariate cointegration technique, this paper has considered the degree of sterilisation that the Pakistan has used in controlling capital flows. The evidence suggests that Pakistan sterilises around 72 percent of international reserve inflows in the long-run while 88 percent in the short-run during the period of study.Money Supply; sterlization; capital inflow; dometic credit; unit root; cointegration

Influence of single and multiple dry bands on critical flashover voltage of silicone rubber outdoor insulators: simulation and experimental study

Dry band formation on the surface of outdoor insulators is one of the main reasons leading to flashover and power outages. In this paper, a dynamic arc model is proposed for single and multiple dry bands configuration to predict the critical flashover voltage for silicone rubber outdoor insulators. An arc is modelled as a time dependent impedance consisting of a Resistor Inductor Capacitor (RLC) circuit. The effect of dry band location and existence of multiple dry bands on critical flashover voltage is investigated. To validate the proposed model, experiments were conducted in a climate chamber under controlled environmental conditions on rectangular silicone rubber sheets polluted using improved solid layer method based on IEC 60,507. Tests were conducted at different dry band configurations and pollution severity levels. A good correlation was found between experimental results and simulation results. This model can provide a good foundation for the development of mathematical models for station post insulators having multiple dry and clean bands and can be used in the design and selection of outdoor insulators for polluted conditions

Energy Demand in Pakistan: A Disaggregate Analysis

This study examines the demand for energy at disaggregate level (gas, electricity and coal) for Pakistan over the period 1972-2007. Over main results suggest that electricity and coal consumption responds positively to changes in real income per capita and negatively to changes in domestic price level. The gas consumption responds negatively to real income and price changes in the shortrun, however, in the long-run real income exerts positive effect on gas consumption, while domestic price remains insignificant. Furthermore, in the short-run the average elasticities of price and real income for gas consumption (in absolute terms) are greater than that of electricity and coal consumption. The differences in elasticities of each component of energy have significant policy implications for income and revenue generation.Pakistan, Energy Demand

Energy Demand in Pakistan: A Disaggregate Analysis

This study examines the demand for energy at disaggregate level (gas, electricity and coal) for Pakistan over the period 1972-2007. Over main results suggest that electricity and coal consumption responds positively to changes in real income per capita and negatively to changes in domestic price level. The gas consumption responds negatively to real income and price changes in the short-run, however, in the long-run real income exerts positive effect on gas consumption, while domestic price remains insignificant. Furthermore, in the short-run the average elasticities of price and real income for gas consumption (in absolute terms) are greater than that of electricity and coal consumption. The differences in elasticities of each component of energy have significant policy implications for income and revenue generation.Energy Demand, Disaggregate Analysis, Cointegration

Energy Demand in Pakistan: A Disaggregate Analysis

This study examines the demand for energy at disaggregate level (gas, electricity and coal) for Pakistan over the period 1972-2007. Over main results suggest that electricity and coal consumption responds positively to changes in real income per capita and negatively to changes in domestic price level. The gas consumption responds negatively to real income and price changes in the shortrun, however, in the long-run real income exerts positive effect on gas consumption, while domestic price remains insignificant. Furthermore, in the short-run the average elasticities of price and real income for gas consumption (in absolute terms) are greater than that of electricity and coal consumption. The differences in elasticities of each component of energy have significant policy implications for income and revenue generation.Energy Demand, Cointegration, Pakistan